Finance & Commerce Article: Helping businesses navigate defense contracting
Posted 3/09/11 (Wed)
Helping businesses navigate defense contracting
by Dan Emerson
Published: March 8th, 2011
For companies hoping to sell goods and services to the federal government, the rules, regulations and other bureaucratic red tape can represent “a morass,” says Chip Laingen, the executive director of the Defense Alliance of Minnesota.“I’ve been doing this (government contracting) for six years, and I still don’t understand it,” Laingen says in a Q&A. “Succeeding is hard, but it’s worth the effort.”
The alliance aims to help Minnesota businesses interested in securing federal research dollars and government contracts, says Laingen, a retired Navy commander and the communications and research and development director at St. Paul-based Minnesota Wire, a government contractor and custom development and manufacturing company.Laingen’s employer, Minnesota Wire Chief Executive and Chairman Paul J. Wagner, founded the alliance in 2004.
Q. How did the founding of the Defense Alliance come about?
A. As we at Minnesota Wire started to learn lessons on how to work with and sell to the government, we found out two things: one, it’s really hard, and two, there was nobody in this area that really explained how to do it. So we felt we really needed to share the lessons we were learning. We had a lot of contacts with knowledge in a lot of areas (related to defense contracting). So we started having open meetings, created a website and newsletter.
Q. How do you describe the alliance’s mission?
A. The two things we really want to do are to provide innovation and value at a fair price, and use that as a vehicle to stimulate economic development in this region.
Q. What is your membership, in number of companies, and what size are they?
A. We don’t have a formal membership process. Membership is free. Since 2004 we’ve had 535 companies register for our meetings. We have a very diverse group participating … large companies such as 3M, United Health, Lockheed Martin, Ecolab … [and] a number of nontraditional defense contractors. The vast majority are small to medium high-tech or service companies. We try to encourage a “membership” that is primarily manufacturing and generally high-tech.
Q. Do you think there are more Minnesota companies involved in defense contracting than most people realize?
A. Yes. By a conservative estimate at least 2,500 companies in Minnesota do something for defense. A lot of those are simple things - like selling paper to the defense world. The Defense Department is the largest consumer in the nation.
Q. How often does the alliance meet, and what topics do you cover?
A. We have five meetings per year. Defense contracting is so vast - it’s about so much more than bombs and bullets. Just the technology area includes everything from autonomous, unmanned systems to RFID (wireless) and UID (unique identification) to naval systems, soldiers’ systems. … We break it all down by technology areas, also types of government contracting - for disadvantaged firms, underserved areas, by geographical areas. … Our events are informational. We bring in speakers from the Pentagon, Department of Energy and other federal agencies.
Q. Along with providing a place for companies and government reps to share information, how else do you help the companies?
A. We partner with other trade groups such as the Minnesota High Tech Association. And, occasionally, we take eight or 10 small businesses to visit federal defense depots, like the Crane Naval depot in Indiana or the Army depot in Huntsville, Ala. Sometimes we take them to D.C.
One of our initiatives is using a grant from the SBA (Small Business Administration) to create a regional innovation cluster. There were 187 groups nationwide that applied to be awarded one of 10 SBA contracts, and we were the only small business group awarded one - $1.2 million from the SBA over two years. There are a lot of small companies in the upper Midwest involved in innovation in power and energy, so we chose to focus the cluster on that technology area.
We have partners in each state to find these companies, mentor them, vet their technology and then make introductions to agencies that procure for the Defense Department. It’s really neat to see people succeeding who aren’t turned off by the government bureaucracy, and there is a lot of that. Government contracting is a morass. I’ve been doing this for six years, and I still don’t understand it. Succeeding is hard, but it’s worth the effort.
Q. Would you like to find a more permanent funding source for the alliance?
A. We don’t want to rely on federal funding. Even if the SBA funding lasts for two years, it will be my challenge between now and the end of 2012 to demonstrate the value of the Defense Alliance as a stand-alone proposition. Where funding will come from, we don’t know yet. It will probably be a combination of dues or targeted service fees or a third option: being a supply chain house for major defense contractors such as Lockheed Raytheon and Boeing.
Education: Bachelor’s, international relations, University of Minnesota; master’s, public affairs, Hubert H. Humphrey Institute (U of M).
Family: married, three children